The number of people with diabetes worldwide is predicted to increase from 415 million in 2015 to 642 million in 2040. The health care costs of treating the disease account for 12% of the global health expenditure and continue to be a huge economic burden (IDF World Atlas 2015). Type 1 diabetes mellitus (T1DM) constitutes 10-15% of the disease burden. It is an autoimmune disease, thought to be triggered by genetic or environmental factors in early childhood, which results in antibody- mediated destruction of insulin producing pancreatic ?-cells causing life-threatening hyperglycemia. In contrast, type 2 diabetes mellitus (T2DM) develops later in life and results from insulin resistance in target tissues and inflammation coupled with an inadequate compensation by the ?-cells. A major limitation in effectively treating both forms of the disease is preventing a decline in ?- cell function and/or mass. Recently, the Kulkarni lab identified Serpin B1 (an intracellular SERine Proteinase Inhibitor) as a liver-derived protein factor that promotes a compensatory ?-cell response by inhibiting elastase and inducing ?-cell proliferation in multiple species by activating growth/survival factor signaling pathways. The structurally and functionally related human plasma protein alpha 1- antitrypsin (AAT, serpin A1) is in late stage clinical trials to delay the onset of T1DM after a majority of independent studies showed it could restore euglycemia in animal models of T1DM by preserving functional ?-cells, enhancing islet allograft survival and modulating cellular immunity. Early stage clinical study results indicate that AAT reduces HbA1c levels and anti-islet cell antibody titers. Serpin B1 (sB1), like AAT, is an effective anti-inflammatory elastase inhibitor but unlike AAT, also induces ?-cell proliferation, promotes insulin + cells in pancreatic ductal lining epithelia, inhibits NETosis (another pro-inflammatory process involved in diabetes) and regulates the expansion of Th17 cytokine producing cells in vitro. We therefore propose that sB1 may also work in vivo, either alone or in combination with AAT, to provide superior therapeutic effects in animal models of T1DM. We will test if sB1 -/+ AAT can more effectively prevent the onset of, or treat established, T1DM in the NOD mouse model by inducing proliferation of functional ?-cells, enhancing production of insulin by ductal lining cells and protecting ?-cells from the immune response. If successful, we will further develop this technology through preclinical and clinical testing with the intent to improve long-term outcome for patients with T1DM. The proposed research in phase I will focus on (Aim 1) producing highly purified active recombinant proteins and (Aim 2) providing proof-of-principle in animal models of T1DM. The outcome of these studies will guide the design of future efficacy studies in animals and humans.